Biden’s Parting Gifts

The decisions reached in Prime Minister Narendra Modi’s meeting with US President Joe Biden during his recent visit to the US continue to be parsed by experts but their scope and ambition make it evident that initial comments in the media about Modi calling on a “forlorn”, allegedly lame-duck leader proved to be quite off the mark. The commentary was driven more by a desire to run down the importance of the meeting as a careful attention to facts would have provided a more accurate picture. No Modi visit or meeting with foreign leaders is bereft of preparation and purpose. The prime minister’s visit was preceded by intensive discussions on how to further deliver on the framework of cooperation set out in Modi-Biden meetings in 2023. A key element of the White House readout is a commitment to unlock $1 billion in funding to develop India’s clean energy supply chains with applications that include daily-use consumer products like air conditioners and fans. At the same time, technology transfers envisage development of wind, solar and energy grids that will position India at the centre of global supply chains and further enmesh the Indian and US economies. Climate change solutions are imperative to sustaining India’s growth and, at the same time, limiting loss of precious environmental capital that will impact public well-being. The US statement praises the Modi government’s production-linked incentives (PLIs) and speaks of more investments to strengthen competitiveness. This is interesting given that PLI schemes faced criticism from some quarters for being protectionist although the Indian government argued the intention is to build domestic capacity while not excluding foreign capital or cooperation. The visit, to use a British affectation, went “swimmingly well”, and the usual suspects—Khalistanis and anti-India groups like the Indian American Muslim Council—failed to make any impression during Modi’s stay in Washington and New York. In contrast, the visit of Congress leader Rahul Gandhi to the US just ahead of the prime minister’s scheduled tour continues to attract controversy for his comments on India’s democracy and meetings with India baiters.

Time For GST Reform

The concern voiced by economists and media commentators about the need to rationalise GST rates is being echoed in official chambers as well. A committee of the GST Council considering options is expected to recommend a collapsing of the 12 per cent and 18 per cent rates into one, a move that finds resonance among economists who warn about the risks of adopting a status quoist attitude that reflects a reluctance to rock the boat. The debate received a fillip with a well-considered article by M Govinda Rao, a former director of the National Institute of Public Finance and Policy (NIPFP), who not only argued for the need to further reform GST but presented solutions about how a 15 per cent rate instead of the 12 and 18 per cent slabs might be feasible without impacting the revenues of states. Rao is well respected as a public finance economist and it is somewhat ironical that his talents were underutilised by the Manmohan Singh government when he headed NIPFP. Though Singh knew Rao, policy under the UPA government was often driven by activists and experts who were part of the Sonia Gandhi-led National Advisory Council (NAC). NAC backed a “rights-based” agenda that involved public spending without sufficient regard for financial accountability and viability. Rao has earned a reputation for straight talk that involves calling a spade a spade as he did with the GST debate.

Shivraj’s Farmer Connect

Shivraj Singh Chouhan, Union agriculture and rural development minister, has met several farm delegations to discuss pressing issues and demands in recent weeks. This week, he met the Bharatiya Kisan Union (independent BKU), with the deliberations focusing on measures to increase the use of less toxic fertilisers and reduce the impact of flooding caused by increasing instances of extreme or high rainfall. So far, BKU factions that led the stir against the farm laws and continue to squat along the Shambhu border have not joined the talks. This is not surprising since the Left-aligned unions, who have a single-point agenda of demanding legal guarantees for minimum support prices (MSP), lack any particular concern about measures that can improve farmer welfare like diversification of crops and modernising agriculture. But Chouhan seems the right pick as the Modi government’s ambassador to hold a dialogue with farm groups as he is credited with making Madhya Pradesh an agricultural power house during his long tenure as chief minister. He has an informal, down-to-earth presence that connects with farmers who see him as someone who understands their needs and speaks their language.

Reading the Chinar Leaves

As the Jammu & Kashmir elections hurtled to a climax amid hectic electioneering, the suspense over the likely outcome only deepened. The independents put up by the banned Jamaat-e-Islami have defied attempts to paint them as likely BJP proxies. The turnout in areas where earlier boycott calls by Jamaat and separatists resulted in low polling indicates that voters backing these candidates showed up at polling booths. This can potentially upset the calculations and hopes of regional parties like PDP and the National Conference (NC) which is allied with Congress. In a telling comment, NC leader Omar Abdullah expressed disappointment over Congress’ lacklustre campaign in the Jammu region where BJP seems to have gained momentum after a slow start. All of this means the elections may not throw up a clear winner. That could set the stage for possibly complicated discussions on post-poll alliances or even a situation where a government is not formed for a while. The de facto extension of Lt Governor Manoj Sinha’s rule is the last thing regional parties want. No wonder they are trying to outdo one another in sectarian rhetoric with PDP candidate Iltija Mufti and Abdullah mourning the death of Hezbollah leader Hassan Nasrallah in a bid to strike what they hope will be a populist chord.

Karnataka to Haryana

The woes of Karnataka Chief Minister Siddaramaiah are worsening and the state government’s decision to withdraw its general consent to CBI’s actions in corruption and bribery cases saw BJP raking up the issue in the Haryana campaign whereby it accused Congress of being unrepentant about the involvement of its leaders in scams. BJP has been warning voters that electing Congress will bring back the days when nepotism and graft were commonplace in the state. While it remains to be seen if BJP beats anti-incumbency, the Karnataka developments have provided the party some handy ammunition.

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